theme 1 section 5 -entrepreneurs and leaders

Question 1

what is an entrepreneur?

Answer 1

an entrepreneur is someone who sets up a business and takes on the risks and responsibilities associated with new business activity. Usually with the aim of gaining a reward (profit)

Question 2

what are the several key roles of an entrepreneur?

Answer 2

-creating and setting up a business
- running and developing a business
-bringing innovation to the business world
- anticipating risks and uncertainties
- overcoming barriers to entrepreneurship

Question 3

creating and setting up a business, key processes

Answer 3

1 -An entrepreneur will need to spot a gap in the market/ the need for a product
2 - Once a entrepreneur has a good business they will need to write up a business plan
3 - research the business idea thoroughly ( consider everything, marketing mix, location and finance requirements)
4- raise the finance needed to start the business and acquire resources

Question 4

what is a business plan?

Answer 4

A business plan is a legal document which contains the initial/ main aims and objectives of a business and how they will achieve these aims and objectives. a business plan may also contain the legal/ ownership structure of a business.

Question 5

key steps to running and developing a business.

Answer 5

• have to keep up with the law,business’s sales, marketing techniques and accounting
  -continue to do market research, check for any changes which could affect the business
  -set aims and objectives as the business grows and expands
• as the business grows and expands it may become more difficult for the entrepreneur to manage the business and all of it’s functions so they may employ people to manage different sections of the business.

Question 6

bringing innovation to the business world, key steps/ aspects

Answer 6

• entrepreneurs need to be innovative and think of new products and new ways to do things.
• As the business grows and expands the entrepreneur may begin to employ people to come up with new ideas etc for them - not think of all new ideas personally
• the process of encouraging employees to do this is called intrapreneurship

Question 7

what is intrapreneurship?

Answer 7

intrapreneurship is the process of encouraging employees to take risks and experiment with different ways to things, within a business. Intraprenurship is essentially thinking like an entrepreneur but within a business.
- often managers may need to think of new ways to do things within a business and adapt this mentality although they may not have been explicitly instructed to do so.

Question 8

examples of different barriers that entrepreneurs may have to overcome to start a business.

Answer 8

1- lack of finance/ money
2- lack of confidence
3- lack of training or experience
4- firms may lack entrepreneurial capacity

Question 9

why may an entrepreneur face a lack of finance?

Answer 9

• businesses which need large machinery or lots of technology may have high start up costs, therefore need a large initial investment
  -may have a good business idea but unable to start it as they lack financial capability

Question 10

what are three ways which an entrepreneur can raise capital (finance) ?

Answer 10

1 - bank loan
2- business angels ( business angels are private individuals who usually have a high net worth and business experience who want to invest in a business)
3- crowdfunding

Question 11

barriers to entrepreneurship -
lack of confidence

Answer 11

• an entrepreneur may have a lack of confidence due to a fear of failure
• may not believe that their business idea will succeed
• need to develop a strong belief that their business idea will succeed and be able to push that onto other individuals such as potential customers or investors

Question 12

barriers to entrepreneurship -
lack of experience/ training

Answer 12

• an entrepreneur may have a good business idea but they might not feel that they have enough training or experience to follow through with it
• make sure that they learn as much as they can about business before they start
• could get a job working in/for a similar business to gain experience before they set up their own business

Question 13

how does an entrepreneur assess risk ?

Answer 13

• an entrepreneur can consider the probability that the decision they will make will have a negative impact on the business, and weigh this up with what they would gain if things went well.The entrepreneur can then make a decision on whether they want to take the risk or not.

Question 14

what is an uncertainty ?

Answer 14

an uncertainty is something which is beyond an entrepreneur’s control such as a natural disaster. Although an entrepreneur can’t predict an uncertainty they can keep up with things such as the state of the economy and put practices in place so that if all else fails the impact on the business won’t be as bad as it could have been.

Question 15

what are some examples of an uncertainty?

Answer 15

1- health scares such as covid 19 may affect supply and demand
2- political factors, if a new political party is in charge they may introduce new taxation or regulations which a business will need to obide by.
3- commodity price shocks, may cause production costs to rise.
4- changes in exchange rates, if the value of the pound falls it may be more expensive to import goods (SPICED)
4- changes in legislation

Question 16

what is a comodity good?

Answer 16

a comodity good is a basic good from a primary industry such as agriculture which if often used as a raw material in the production process

Question 17

what are 6 examples of characteristics that a successful entrepreneur usually has ?

Answer 17

1- needs to have initiative, be able to challenge themselves to do something without being told what to do by another individual
2- hard working, when you run a business you don’t have fixed hours and therefore an entrepreneur may need to fix problems themselves at any time of day or night as there might not be someone else avalible to sort the problem out . no one to delegate to.
3- creative, needs to be able to spot gaps in the market and furthermore improve and develop these ideas into more innovative products

Question 18

what are 6 charateristics that an entrepreneur is likely to have ?

Answer 18

• initiative
  -hard working
  -creative
  -self confident
  -a risk taker/ willing to take risks
  -resilient

Question 19

why is it essential that entrepreneurs possess these characteristics?

Answer 19

1- it is important that an entrepreneur has initiative so that they can make decisions themselves at key points without being told what to do by another person or individual
2- hard working, it is important that an entrepreneur is hard working as when running a business there are no set working hours, you have to be able to sort out any issues at any point during the day or night. there also may not be anyone to delegate responsibility to paticularly at the early stages of the business.
3- creative, entrepreneurs need to be able to come up with new and innovative ideas.
4- self confident, need to believe in their own abilities and judgement + their business idea
5- risk taker, need to be willing to take risks which may have potentially negative outcomes in order to come up with innovative products
6- resilient, never give up when the business isn’t doing so well

Question 20

what are the 6 key sills that an entrepreneur needs to have in order to become successful?

Answer 20

• good communication skills
  -good team working skills
  -good problem solving skills
  -good numeracy skills
  -good organisation skills
  -good IT skills

Question 21

why is it important for an entrepreneur to have good communication skills ?

Answer 21

• when being a business owner you are going to have to effectively communicate with lots of people in a confident, concise and non-offensive way.
• need to be able to get messages across to people well

Question 22

why is it so important for an entrepreneur to have good team working skills?

Answer 22

• it is key for an entrepreneur to have good team working skills because when working in business they will need to be able to work with others in order to achieve success for their business.
• need to be able to listen to other people’s views and opinions, share responsobilites and be reliable.

Question 23

why is it so important for an entrepreneur to have good problem solving skills?

Answer 23

• need to be able to clearly identify an issue and assess different solutions in order to put a plan in place to sort these issues out.

Question 24

why is it so important for an entrepreneur to have good numeracy skills?

Answer 24

so that they can effectivley work out costs and revenues in order to makes accurate profits and sales forecasts. As a result of these forecasts they can then make accurate and well informed business decisions. IF an entrepreneur fails to do this then they won’t be bale to make good business decisions and the decisions they make may negitively affect the business.
-effective future planning

Question 25

why is it important for an entrepreneur to have good organisational skills?

Answer 25

-need to have reliable systems on top of the day to day running of the business as well as monitoring the businesses’ overall performance.
-as a result of this enabling good planning stratergies for the future.

Question 26

why is it so important for an entrepreneur to have good IT skills?

Answer 26

• they need to be able to effectivley communicate with people online
  -may need to communicate by e-mail, create a website or promote the business.

Question 27

what is the difference between a business aim and a business objective?

Answer 27

a business aim is a broad target/ goal which is set by a business to achieve in the more long term. Whereas a business objective is a more smaller and manageable target which is set by a business to achieve in the shorter term.

• business objectives are small aims set along the way to achieving the overarching business aim

Question 28

what are some examples of key business objectives?

Answer 28

1- survival
2- maximising profit (profit maximisation)
3- sales maximisation ]
4- increasing market share
5- improving cost efficiency
6- improved employee welfare
7- increased customer satisfaction levels
8- social objectives

Question 29

key info on improving cost efficiency

Answer 29

• cost efficiency is when a business aims to save money for the business by reducing unit costs
• reduced unit costs means that the business can make more profit per unit
• may also enable a business to be able to reduce selling price, which may lead to more sales being made as more people can afford the product. ( increases market share)

Question 30

key info on improved employee welfare

Answer 30

• what is employee welfare? employee welfare relates to any activities which increase the happiness and well being of staff
  -may lead to an increase in productivity and therefore furthermore an increase in output levels
• these products may be of higher quality as a result of higher employee motivation levels
• people are more likely to purchase good quality items

Question 31

key info on increased customer satisfaction levels

Answer 31

• if a business has a high level of customer satisfaction these customers will be more likely to become loyal to the brand and make repeat purchases
  -may pick your brand over competitors
• may lead to increased revenue as customers may be more likely to still purchase items as they have become brand loyal

Question 32

key info on social objectives

Answer 32

• some businesses may set social objectives as customers may be more likely to purchase from a brand which is socially responsible
  -e.g Ben and Jerry’s ice cream in 2019 set up the ‘cone together’ movement with the aim of helping refugees reach safety when escaping from situations.
• some businesses are set up with the overarching aim of being socially responsible. These businesses are called social enterprises.
• have ongoing social objectives/ a social aim which they want to meet